﻿DETAILED ACCOUNT OE VARIOUS SCHEMES.

39

Profit-sharing Deposits.

A type of Profit-sharing possessing much interest is that in
which the right to participate in profits is made contingent upon
the employee’s investing money with his employers, and takes the
form of a rate of interest on the employees’ deposits varying with
the profits of the business. A system of participation of this
natux-e was, in 1866, introduced by the firm of Fox Brothers & Co.
(converted in .1896 into a joint-stock company), of Wellington,
Somerset. This firm of woollen manufacturers had for some time
allowed its managers, foremen, and clerks to l'eceive a bonus calcu-
lated in part according to the year’s profits, in part according to
the status of each. In 1866 they introduced a plan of receiving
from their workpeople sums of money on deposit, to bear a rate of
interest never less than 4J per cent, nor more than 10 per cent.,
but within these limits varying “ in accordance with a certain
fixed scale based on profits, which has been prepared by Messrs.
Fox Brothers and Co.” The firm undertakes to repay any sum up
to £50 on seven days’ notice, above £50 on two months’ notice.
The total number of persons at present employed is 1,561, of whom
239 (186 men and 53 women) are depositors under the scheme. The
opinion of a member of this firm, Mr. Joseph H. Fox, in respect
to the x’esults obtained by the system just described was set forth
by him in a paper read in 1881 before the Social Science Associa-
tion ;* and in connection with the present inquiry he states that
he does not think that the experience of the years that have
passed since the paper was read has in any way modified the
views therein expressed.

After mentioning that the system had been thoroughly appre-
ciated by the workpeople, Mr. Fox continues : —

“ Secondly.—There has been scarcely any trouble experienced in carry-
ing it out, and I am not aware that there has ever been any complaint
made of the rate of interest given, although this has varied from 4-1 per
cent, to 10 per cent., nor am I aware that it has ever been suggested that
the rate of interest was unfair, or any wish expressed to know how it was
calculated. The decision of the partners has in all cases been accepted
without question.

Thirdly.—It has on one or two occasions happened that, when a high
rate of interest has been paid, applications for increased wages have
followed, it no doubt being thought that as the'business had been pros-
perous, a better rate of wages could be afforded.

“ Fourthly.—It is very difficult to form an opinion as to the effect pro-
duced on the carefulness and attention of the workpeople, and whether in
this sense the scheme has answered. I believe it has in the case of many
of the foremen and others in places of trust, but these have had, it must
be remembered, an additional stimulus from their being partly paid in
accordance with results. But with the ordinary workpeople there is not
so much scope for showing interest, and as they nearly all work by the
piece, it can produce but little effect on their industry. There are, of
course, many ways by which economies may be effected—by the saving of
material, by care of machinery, and in other ways; but it is very difficult
to form a definite opinion as to the results of the scheme in this important
respect. It must be borne in mind that in a manufacturing business the
skill and judgment shown in the purchase of the raw material and the sale

Transactions of Social Science Association, 1881, pp. 671-675.